Taking Sephora as an example
As one of the world’s largest consumer markets, China represents not only a huge spending power but also a source of innovative trends. Therefore, China has always been an important target for overseas brands seeking entry.
However, entering the vast Chinese market poses several challenges for businesses, including meeting Chinese consumers’ ever-changing needs and preferences and establishing themselves in a highly competitive market. This article will examine Sephora’s development and strategy in China, using it as an example to provide inspiration and guidance.
Sephora is a global beauty retailer known for its interactive shopping experience and commitment to customer engagement. While many famous international brands have failed to establish their presence in China, Sephora has been firmly rooted for over a decade. Sephora’s success does not refer to the number of stores opened or sales growth but rather the fact that it has established a Sephora model that is both suitable and sustainable for the Chinese market.
The secret to Sephora’s longevity in China is closely related to its consumer-centered growth strategy and the “authentic retail” concept introduced by the former general manager of Sephora China, Bing Chen. “Authentic retail” focuses on the essence of retailing, returns to the needs of consumers, and aims to build a community of beauty for Chinese consumers in multiple aspects, including products, services, channels, etc., and is manifested in four elements: omnichannel retail layout, enhanced consumer experience, digital transformation, and innovative marketing strategy.
Online and Offline Omnichannel Matrix Layout
Sephora’s omnichannel layout didn’t just start in the last year or two; more precisely, it was set from the first year it entered China.
As of December 2023, Sephora has 341 offline stores in one hundred cities and a large online retail matrix in China. In addition to being on nine major e-commerce platforms in China, Sephora has its official website, app, WeChat mini-program, Xiaohongshu, etc., successfully building a closed loop of online and offline consumption.
Sephora is also actively building a supply chain system in China, including back-end warehousing. This move aims to “eliminate unnecessary costs in the logistics process and return a better experience to consumers.
This powerful and precise omnichannel touchpoint builds the most convenient bridge between the retailer and its consumers. As Chen Bing said, “We are truly where the customer is.”
WeChat Ecosystem
It is widely recognised that WeChat has become a highly effective platform for businesses to connect with Chinese consumers and facilitate business transformation.
As early as 2018, Sephora began using the WeChat ecosystem to open private channels with its numerous tools, such as enterprise WeChat, WeChat mini-program, WeChat video, and WeChat community, effectively breaking channel boundaries.
Sephora has created a mini-program store and attracts consumers to purchase at the store. This move aims to “eliminate unnecessary costs in the logistics process and return a better experience to shoppers. Channels like the WeChat official account and WeChat videos. Meanwhile, encouraging users to share Sephora with their friends and groups in exchange for gifts through several incentive functions in the mini-program, such as “friend boosts”. This triggers greater social fission, allowing consumers to benefit from interactive features, while Sephora efficiently attracts new consumers and boosts sales within the WeChat ecosystem.
As a consumer, upon entering the store, you can quickly scan the QR code and access Sephora’s digital services—follow Sephora’s WeChat Official Account, get the store’s BA (Beauty Advisor) business card, and access online services and beauty-related knowledge. With just a click on the menu bar, you will be redirected to the mini-program for online consultation, subscription, and purchase. Additionally, anywhere you are, you can receive global cutting-edge beauty news and make online appointments for beauty services through Sephora’s SEPHORA WeChat mini-program.
Sephora has also implemented an all-channel membership system; no matter which channel you register in, your cell phone number enables automatic recognition, allowing you to enjoy the corresponding level of membership rights and services in the mini-program for an immersive experience.
Sephora has established a strong technological barrier by linking online and offline seamlessly with the new omnichannel retail experience.
The Enhanced Consumer Experience.
Chen Bing pointed out that “although the market environment has been changing, the constant in the midst of change is the customer experience.”
In addition to expanding its product matrix, Sephora offers diverse customisation services, such as a free 15-minute beauty service in-store, which you can try before you buy. Instructional videos can be played for consumers to learn and experience independently. Even exclusive ingredient pictures were provided to help consumers with different skin types find the right products.
Furthermore, Sephora stores have introduced digital beauty tools, such as Fragrance Studio, Foundation Finder, and Virtual Artist. Consumers can make appointments through Sephora’s APP or mini-program to experience these exclusive services. This allows for more extensive and lasting interactions, helping Sephora establish stronger customer connections.
Sephora connects channels, links data from online and offline, and employs emerging technologies to enhance the consumers’ experience effectively.
Chinese Social Media and its KOL Strategy
Sephora is highly focused on its reach on Chinese social media and has its accounts on popular platforms like WeChat, XiaoHongShu and Douyin (Chinese TikTok) to interact and communicate with consumers. On the one hand, Sephora popularises beauty knowledge and promotes products through posts and live streams, adapting to consumers’ increasingly “rational” consumption behaviours while selecting different platforms to match the content based on consumers’ habits and decision-making. For example, Sephora uses XiaoHongShu for product marketing, its APP to recommend niche and up-and-coming brands, and Douyin for BA training and spreading beauty concepts.
On the other hand, consumers believe in social sharing and prefer to pay for products recommended by others or KOLs (Key Opinion Leader). Sephora continues to promote its KOL strategy and selected ten beauty bloggers globally to serve as ambassadors for the brand’s programme in 2018.
By deploying on China’s mainstream e-commerce platforms and social networks, Sephora can spread its marketing messages at any time while being able to respond to consumer needs in a timely manner and successfully satisfy their diverse needs.
Leading the Marketing Playbook
Sephora has always been at the forefront of digital marketing and has utilised various technologies for its campaigns; here are some examples.
In 2015, Sephora launched the “WeChat shake it to win coupon” campaign using IBeacon technology, which attracted more consumers to consume in stores and follow their WeChat accounts. The same year, it became the first beauty retailer to post ads on WeChat Moments, promoting its self-branded mask.
In 2017, Sephora took the innovative step of using live streaming to connect with online and offline customers. While most other companies only began using live streaming as a marketing strategy in 2020, Sephora was already ahead of the curve.
That same year, Sephora hosted the beauty industry’s first all-live format beauty contest on Christmas Day. Users could participate in the audition by uploading makeup videos through H5 access to the event area. The contest attracted 1.3 million participants, and the participating videos received nearly 70 million views.
During the Spring Festival of 2018, Sephora partnered with Alipay to launch a mobile “AR scanning campaign” using AR technology. Consumers who use the Alipay App to scan Ads on Sephora’s store windows and posters can get New Year’s gift packs, vouchers and other exclusive rewards, which may be redeemed on Sephora’s website or in-store while retaining the user’s information.
In 2020, Sephora launched the Smart BA (Beauty Advisor) programme. This programme digitally empowers 3,000 beauty advisors through WeChat, bringing consumers into the enterprise’s private domain by providing one-on-one remote personalised service and extending online business with their professionalism and aesthetic vision.
In 2022, Sephora launched the “China Accelebrate” programme. The programme aims to support five high-quality local brands to achieve more than RMB 100 million in annual revenue and help them gain more exposure in the international market.
Sephora’s success in China can be attributed to its omnichannel approach, which prioritises the customer experience. This involves understanding the shopping habits and needs of Chinese consumers and then using the layout of different channels to provide consumers with quality products, improved shopping experiences, and innovative marketing. It’s essential for overseas merchants to master this approach to establish a firm presence in China. Contact us today to enhance your strategy for attracting Chinese customers!
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